Courtesy of Mish.
Citibank’s Global Chief Economist Willem Buiter is another in a line of economic idiots (sorry, but no other word is more accurate) who call for abolishing cash and taxing deposits.
Bloomberg author Lorcan Roche Kelly fell for Buiter’s nonsense hook line and sinker in Citi Economist Says It Might Be Time to Abolish Cash.
Buiter proposes that interest rates should have been -6% during the crisis. Kelly is enough of an fool to say “It seems Buiter is correct“.
On May 28, 2014, economist Kenneth Rogoff proclaimed to the Financial Times, Paper money is unfit for a world of high crime and low inflation.
While I would agree with the notion that fiat paper is unfit, thus requiring a return to the gold standard, that is not exactly what Rogoff had in mind.
Buiter Calls for Helicopter Drop
Buiter carried the idea even further, and actually did so in advance of Rogoff.
On May 9, 2012, Buiter Central Banks Need To Drop Money From Helicopters, And Perhaps ABOLISH CURRENCY COMPLETELY.
Negative Interest Rates
I have discussed the stupidity of negative interest rates several times recently. The natural rate of interest can never be negative.
For discussion, please see Stupidity of Negative Interest Rates Expands to Spain; Deflation Shock Thesis.
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